Facts

In 2004, the County of San Diego entered into a Disposition and Development Agreement ("DDA") with defendant Ryan Companies US Inc. Under the DDA, Ryan obtained the right to develop 108 acres of county-owned land in the City of Santee, located at the northern terminus of the San Diego trolley. Ryan obtained entitlements from the City of Santee to construct a mixed-use project, including offices, a movie theater, and multi-family residential.

In 2008, the county began the environmental review process to study the expansion of the Las Colinas Detention Facility, a county-operated women's jail. Initially, the orientation of the expanded jail was in an east/west direction, to the south of the area to be developed by Ryan under the DDA. Ultimately, the county re-oriented the expanded jail in a north/south direction, which included part of the land, which Ryan was to develop under the DDA.

The county filed an eminent domain action to acquire from Ryan the development rights over 15.5 acres of county-owned land that the county had granted to Ryan under the DDA in 2004.

PLAINTIFF'S CONTENTIONS:
The county contended that the development rights were essentially worthless, given the real estate market and the fact that the rights would expire in 2015. It offered $25,000 to Ryan to acquire the development rights.

DEFENDANT'S CONTENTIONS:
Ryan contended that it was entitled to be compensated for the share of its total investment costs, pursuant to the formula set forth in the DDA. Ryan also contended that the expanded jail caused severance damages to a portion of Ryan's remaining development rights, because the expanded jail split the planned development and a major point of access would now require vehicles and pedestrians to pass the entrance to the re-oriented jail. Ryan contended it was entitled to compensation of $2.4 million.

Settlement Discussions

The county's trial appraisal was $25,000, the same amount it had offered before the case was filed. Ryan's trial appraisal was $2.4 million.

Result

The court denied Ryan's challenge to the County's right to take the property by eminent domain. The case settled for payment of $45,000 for the condemned property rights, inclusive of statutory interest and costs, and $1,656,325 for resolution of collateral contractual issues related to the DDA.

Other Information

FILING DATE: May 21, 2010.